Indian economy to remain on fast track: Nath

Indivjal Dhasmana

Davos, Jan 30 (PTI) The Indian economy is expected to
remain on a fast track of 7-7.5 per cent expansion in the next
fiscal beginning April despite a gloomy outlook for the world
economy, India's Commerce and Industry Minister Kamal Nath
said here.

Nath's optimism contrasts with the International
Monetary Fund (IMF) downgrading growth projections for India
to 5.1 percent for the 2009 calendar year against its previous
estimate of 6.3 percent.

"We hope to continue at ... 7-7.5 next fiscal," Nath
said at a press conference at the World Economic Forum last
night. Different official estimates suggest that after three
years of nine per cent expansion, growth is set to moderate to
around seven per cent in the current fiscal ending March.

He said domestic demand would keep driving the economy
even if export prospects deteriorate.

"Economies heavily dependent on exports for economic
growth are going to take a hit. We have only 15-16 percent of
GDP (from) exports," he said.

Exports amounted to USD 162 billion in 2007-08. The USD
200 billion target for the current fiscal would be difficult
to achieve, exporters feel.

Export-oriented sectors like textiles, and gems and
jewellery face compression of demand in the West, he said,
adding, "ten out of 11 diamond pieces are cut and polished in
India. This is a huge employment-generating sector," he said.

While a setback to these sectors could result in five
lakh job losses, opportunities in other sectors like telecom
and fast-moving consumer goods can compensate for that, Nath
said.

He said enhanced government spending would increase
domestic demand. "There are no fundamentals which have gone
wrong. However, the hype is gone, but sentiment and
fundamentals are strong," he said.